Retirement rendez-vous bnc.ca/retirement - Chronicle N°3

What is a retirement plan?

Last week, we reviewed the main steps involved in retirement planning. These ultimately lead to the creation of a retirement plan—nothing too difficult so far. But, in concrete terms, what is a retirement plan? How is it useful? Do you really need one? Let’s see if we can get some answers.

A retirement plan is a very important tool for anyone who wants to enjoy a happy retirement based on their needs and aspirations. A complete plan includes your retirement goals, an estimate of the income required to achieve them, and a strategy to make it all come together. This strategy addresses the growth, protection and transfer of your wealth, in other words, all your assets.

In fact, a retirement plan may include multiple components: your long-term budget, projected retirement income, investment strategy, withdrawal plan, insurance coverage and estate planning. It all depends on your situation, your needs and your objectives. That's why it's so important to put it on paper. Not only does a written plan help you make sure you don't leave anything out, it also gives you a more concrete vision of your long-sighted project.

I believe that flexibility is one of the greatest qualities of a retirement plan. It's not carved in stone: your plan must be updated to take into account the events that happen in your life. You should be able to refer to it regularly and adjust it whenever a major change occurs in your personal life, such as marriage, birth, promotion or divorce.

Ideally, you should review your plan every three years and whenever your situation changes. It's essential to make sure that your objectives and your strategy are still valid. Trust your advisor to be a valuable ally in helping you make the right decisions, especially when adjustments need to be made. Regardless of what step you may be in when preparing your plan, his expertise can always be of benefit.